Maryland Sweepstakes Casino Ban Nears Passage as iGaming Stalls
Maryland’s General Assembly is moving aggressively to outlaw sweepstakes casinos in 2025, with a ban bill advancing through committee even as the state’s broader iGaming legalization effort runs out of steam. The twin developments leave Maryland gamblers in a tightening vice: one popular workaround is being shut down, while the regulated online casino alternative remains years away. For players who value privacy and low-friction access, the stakes could not be higher.
Maryland Sweepstakes Casino Ban Advances Through 2025 Legislative Session
How the Ban Bill Reached This Point
Maryland House Bill 1140 and its Senate companion target sweepstakes casinos by classifying their virtual currency model as illegal gambling under state law. The legislation defines sweepstakes coins, gold coins, and redeemable prizes in a way that strips these platforms of the legal gray area they have operated in since at least 2017. Committee votes in both chambers during March 2025 pushed the bill closer to a full floor vote than any prior attempt.
Sweepstakes casinos like Chumba Casino, McLuck, and Pulsz have attracted millions of U.S. players precisely because they sidestep state gambling licenses and, critically, the identity verification requirements attached to them. Maryland currently has no licensed online casino market, making sweepstakes platforms the de facto digital gambling option for residents. Eliminating them without a licensed replacement in place would leave a legal vacuum that offshore and no-KYC platforms are well positioned to fill.
Supporters of the ban, including the Maryland Lottery and Gaming Control Agency, argue that sweepstakes casinos operate as unlicensed gambling businesses that generate no tax revenue for the state and offer players no consumer protections. Opponents counter that the platforms are legal under federal sweepstakes law and that banning them without legalizing iGaming simply pushes players to unregulated offshore sites, according to reporting by Covers.com [1].
The Legislative Timeline and What Comes Next
The Maryland General Assembly’s 2025 session runs through April 7. Both chambers must pass identical versions of the sweepstakes ban for it to reach Governor Wes Moore’s desk. Moore has not issued a public statement on the bill, but his administration has signaled general support for tightening gaming oversight in the state.
If the bill passes and Moore signs it, enforcement could begin as early as summer 2025. Platforms would likely be required to geo-block Maryland IP addresses and cease accepting Maryland-registered accounts. Operators who fail to comply face civil penalties under the state’s existing gambling enforcement statutes, which carry fines of up to $5,000 per violation per day.
iGaming Stall Leaves 6.2 Million Maryland Adults Without a Legal Online Option
Why iGaming Legalization Failed to Gain Traction in 2025
Maryland’s iGaming bill, which would have authorized licensed online casinos operated by the state’s six land-based casino licensees, did not advance out of committee during the 2025 session. Disagreements over tax rates, the number of permitted online skins per land-based license, and revenue-sharing with local jurisdictions all contributed to the stall. New Jersey taxes online casino gross gaming revenue at 15 percent, while Maryland legislators debated rates ranging from 20 to 55 percent, a spread wide enough to kill operator interest at the higher end [2].
Maryland’s six licensed casinos, including MGM National Harbor and Live! Casino, had lobbied for a framework similar to New Jersey’s, which generated $2.4 billion in online casino revenue in fiscal year 2024. Without a competitive tax structure, major operators signaled they would not invest in Maryland’s online market even if legalization passed. That commercial reality gave legislators little incentive to push a bill that might produce minimal tax revenue.
The failure is not unique to Maryland. Only seven U.S. states currently offer legal, licensed online casino gambling as of April 2025: New Jersey, Pennsylvania, Michigan, West Virginia, Connecticut, Delaware, and Rhode Island. Roughly 38 states have considered iGaming legislation since 2020 without passing it, according to the American Gaming Association [3].
The Revenue Gap Maryland Is Choosing to Ignore
Pennsylvania collected $2.1 billion in online casino gross gaming revenue in fiscal year 2024, generating approximately $630 million in state tax revenue at its 36 percent effective rate. Maryland, which borders Pennsylvania and shares a significant commuter population, collects zero dollars from online casino activity. Every dollar Maryland residents spend on sweepstakes platforms or offshore sites is revenue the state never sees.
The Maryland Department of Legislative Services estimated in a 2024 fiscal note that a licensed iGaming market could generate between $150 million and $400 million in annual state tax revenue within five years of launch, depending on the tax rate and number of licenses issued. That estimate now sits on a shelf while the legislature moves to ban the only digital gambling product currently available to residents.
| State | iGaming Legal? | 2024 Online Casino Revenue | State Tax Rate |
|---|---|---|---|
| New Jersey | Yes (since 2013) | $2.4 billion | 15% |
| Pennsylvania | Yes (since 2019) | $2.1 billion | 36% |
| Michigan | Yes (since 2021) | $1.8 billion | 20-28% |
| Maryland | No | $0 (licensed) | N/A |
The table above illustrates the scale of the opportunity Maryland is forgoing. Neighboring states with comparable populations are collecting hundreds of millions in annual tax revenue from a product Maryland residents are already consuming through unregulated channels. The policy gap is not a matter of public demand; it is a matter of political will and tax rate arithmetic.
Sweepstakes Casino Market Grew to an Estimated $5 Billion in 2024
The U.S. sweepstakes casino market reached an estimated $5 billion in gross coin sales in 2024, up from roughly $1 billion in 2020, driven almost entirely by states where licensed iGaming is unavailable. Platforms like Chumba Casino, operated by VGW Holdings, and Pulsz, operated by Playtika, built their user bases on the legal argument that purchasing gold coins and receiving sweepstakes coins as a free bonus does not constitute gambling under federal law [1].
That legal argument has held up in most states, but Maryland is now joining a small group of states, including Washington and Michigan, that have moved to explicitly prohibit the model. Michigan, which has licensed iGaming, banned sweepstakes casinos in 2024 as part of a broader effort to protect its regulated market. Maryland’s situation is different: it has no licensed online casino market to protect, making the ban a restriction without a replacement.
The sweepstakes model’s core appeal is its accessibility. Players can sign up with an email address, receive free sweepstakes coins, and play slot-style games without submitting a government ID, proof of address, or financial documents. That frictionless onboarding mirrors the experience offered by no-KYC offshore casinos and explains why the segment grew so rapidly in states where licensed alternatives do not exist.
Industry analysts at Eilers and Krejcik Gaming projected in January 2025 that sweepstakes casino revenue could reach $8 billion annually by 2027 if the legal environment remains stable. Maryland’s ban, if replicated by other large states, could significantly compress that projection and redirect player spending toward offshore platforms that operate entirely outside U.S. regulatory reach.
What Maryland’s Sweepstakes Ban Means for Players Who Value Privacy
For Maryland residents who have used sweepstakes casinos specifically because they require no government ID verification, the ban creates a direct and immediate problem. The two most accessible digital gambling options in the state, sweepstakes platforms and licensed retail sportsbooks with online extensions, operate very differently on privacy. Licensed sportsbooks in Maryland, including FanDuel and DraftKings, require full KYC verification including Social Security number submission, a standard that many players find invasive or simply impractical.
The sweepstakes ban does not create a new licensed online casino option. It removes an existing low-barrier one. Players who prioritize account privacy, fast sign-up, and minimal data sharing will find the Maryland-legal options after the ban even more limited than they are today. No-KYC offshore casinos, which accept cryptocurrency and require only an email address to register, will likely see increased interest from Maryland-based players as a direct consequence of this legislation.
It is worth understanding that no-KYC casinos operate outside U.S. state jurisdiction and carry their own risk profile. Players considering them should research licensing, provably fair certifications, and withdrawal track records carefully before depositing. The Maryland situation is a case study in how restrictive state policy, absent a licensed replacement, tends to push privacy-conscious players toward less regulated environments rather than away from online gambling entirely.
Key Takeaways
- Maryland House Bill 1140 targets sweepstakes casinos by reclassifying their virtual currency model as illegal gambling, with a potential enforcement date of summer 2025.
- Maryland’s iGaming legalization bill stalled in the 2025 legislative session, primarily over disagreements on tax rates ranging from 20 to 55 percent.
- The U.S. sweepstakes casino market generated an estimated $5 billion in gross coin sales in 2024, up 400 percent from 2020 levels.
- New Jersey, Pennsylvania, and Michigan collectively generated over $6.3 billion in licensed online casino revenue in fiscal year 2024, money Maryland currently foregoes entirely.
- Maryland’s Department of Legislative Services estimated a licensed iGaming market could produce $150 million to $400 million in annual state tax revenue within five years.
- Only 7 U.S. states currently offer licensed online casino gambling as of April 2025, according to the American Gaming Association.
- Platforms like Chumba Casino and Pulsz, which do not require government ID verification, would be required to geo-block Maryland users if the ban passes and is signed into law.
Frequently Asked Questions
Are sweepstakes casinos legal in Maryland right now?
As of April 2025, sweepstakes casinos occupy a legal gray area in Maryland. They are not explicitly licensed or regulated by the Maryland Lottery and Gaming Control Agency, but they have not been formally banned either. House Bill 1140, currently advancing through the legislature, would change that by explicitly prohibiting their operation and use within the state [1].
When will Maryland ban sweepstakes casinos?
The Maryland General Assembly’s 2025 session ends April 7. If both chambers pass identical versions of the ban bill before that date and Governor Wes Moore signs it, enforcement could begin as early as summer 2025. The exact effective date would be specified in the final signed legislation.
Why did Maryland iGaming fail to pass in 2025?
Maryland’s iGaming bill stalled primarily due to disagreements over the state tax rate, which legislators debated at levels between 20 and 55 percent. At the higher end of that range, major operators indicated they would not enter the market, removing the commercial case for legalization. Revenue-sharing disputes with local jurisdictions also contributed to the impasse [2].
What online casino options will Maryland players have after a sweepstakes ban?
If the sweepstakes ban passes without accompanying iGaming legalization, Maryland residents will have no state-licensed online casino options. Licensed retail sportsbooks with online extensions, such as FanDuel and DraftKings, will remain available for sports betting only. Players seeking online casino-style games would need to look to offshore platforms, which operate outside Maryland’s regulatory framework and carry different risk profiles [3].
The Bottom Line
Maryland is making a bet that banning sweepstakes casinos will protect consumers and preserve the integrity of its land-based casino market. The evidence from other states suggests the opposite outcome is more likely. When Michigan banned sweepstakes casinos in 2024, it had a licensed iGaming market already in place to absorb displaced players. Maryland will have nothing comparable, and the result will almost certainly be a migration of player spending to offshore platforms that generate zero state tax revenue and operate with zero state oversight.
The iGaming stall is the more consequential failure here. Maryland legislators have watched neighboring states collect billions in online casino tax revenue for years while refusing to agree on a tax rate. The sweepstakes ban, absent iGaming legalization, is a policy that restricts consumer choice without creating a safer or more regulated alternative. It is the worst of both outcomes: less access, no new revenue, and no meaningful improvement in player protection.
The players most affected will adapt, as they always do. The question Maryland’s legislature should be asking is not whether to ban sweepstakes casinos, but whether it wants to be the state that collects the tax revenue from its residents’ online gambling or the state that watches that money flow to New Jersey, Pennsylvania, and offshore operators indefinitely.
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Sources
- Covers.com – Reporting on Maryland sweepstakes casino ban legislation and operator responses in the 2025 session.
- Covers.com – Analysis of Maryland iGaming tax rate debates and the stall of online casino legalization in 2025.
- Covers.com – Data on U.S. states with licensed iGaming markets and American Gaming Association figures on legislative activity since 2020.
